People want bigger homes, nicer suburbs to live in and an overall satisfaction that living should be as much about lifestyle more than anything else. However, when applying for a mortgage, lifestyle and relaxation can fly out the window during the process. Followed by pulling out hairs from stress and anxiety of having what you want or the house you have already fallen in love with disappear right in front of your eyes. This can happen from not having enough income, security, deposit and the like to get your loan approved.

Here are some tips on what you will need to know when applying for a first time mortgage:

  1. Visit a lender six to twelve months in advance of shopping for a home. This may sound a little extreme, but sitting down with a lender and working out the figures to see what you can borrow allows you enough time to save up additional money for a deposit, source a higher paying job or go over your original plans of how much you wanted to borrow. Finding out how much you can borrow a month or two prior to having to move out, can be risky. And even riskier is going house hunting and finding your perfect home before seeing how much you can actually afford to borrow.
  2. The lender may give you an estimated repayment amount that you will have to pay inregular instalments towards your mortgage. Make sure before the approval of the loan is granted, that you work out in your budget if you can actually afford those repayments. Lenders do not know all your ‘other’ expenses and costs during the month. The best way to do this is take a look at your bank statement and categorise items such as bills, take out, cable TV etc and total the monthly expenses. Then look out the repayment amounts see how much you might need to derail from your expenses to use to pay your mortgage. If you can’t afford it, go back and ask your lender for a lower loan amount of which you can afford. There have been many cases over the years where people have not looked over their budgets to see if they can afford the repayments and end up blaming the lender when they lose their house.
  3. When saving for your deposit, as a guide you will want to save for 20% off the total loan amount you want to borrow. Then save an additional couple of thousand dollars to pay for other fees such as stamp duty, mortgage insurance, solicitor fees etc. In some cases you can pay a lesser deposit. Note that if buying direct from a builder, you may require a $10,000 or more deposit up front. This is generally included from your deposit to the loan. And you may be entitled to the First Home Owners Grant, which is currently worth $7,000, however this figure can change. If your first mortgage is for an investment you will not be entitled to the First Home Owners Grant.

The most important note to remember when going for your first mortgage is to not stress, read the fine print and look up any terms in the contract you are unsure of or receive legal advice. Focus on the amount you can afford comfortably and be sure to have some lee-way in case interest rate rises and pushes your repayments up. Be confident in getting the best mortgage for you and contact our Australian Mortgage Managers on 1300 799 266 or email This email address is being protected from spambots. You need JavaScript enabled to view it. .